E Fibras: Mexico’s answer to MLPs

Author: | Published: 30 Oct 2015

Mexico's ministry of finance (Secretaría de
Hacienda y Crédito Público) recently
announced rules creating a favourable tax regime for a new
exchange-traded vehicle. Known as E Fibras, these vehicles
could not only change the way investment in the country's
energy and infrastructure sectors occurs, but they could also
provide a significant boost to Mexico's equity markets.

Initially, E Fibras are expected to be used by state oil
company Pemex and the government's electricity provider CFE
(which holds most of the power grid in Mexico) to monetise some
mature assets and recycle capital to invest in new projects.
Private companies holding already developed assets in the
energy and infrastructure sectors will also be able to use
these vehicles for the same purpose. Some assets that could be
subject to investment by E Fibras include: midstream energy
assets such as pipelines and storage systems for oil products;
natural gas infrastructure (including liquefaction...